Learn About Mortgage

Calculators

Wondering how much your mortgage will be? Use our calculators to perform mortgage-related calculations such as your expected monthly payments.

What is a Mortgage Loan?

A mortgage requires you to pledge your home as the lender's security for the repayment of your loan. The lender agrees to hold the title to your property (or in some states, to hold a lien on your title) until you have paid back your loan plus interest. If you do not repay your mortgage loan, the lender has the right to take possession of your house and sell it in order to satisfy the mortgage debt.

Principal & Interest.

All Mortgages have two features in common:

Principal: The first feature is the mortgage principal,
which in the actual amount you borrow. For example, if you
take out $200,000 mortgage, you mortgage principal is $200,000.

Interest: The second feature is the interest, which
is the money you pay for the use of the money you borrow.
Interest rate are highly volatile and how much interest
amount you pay over the mortgage loan depends upon many
different factors. The interest you pay on your mortgage
may be deductible. (Consult a tax professional for advice)
The higher the income tax bracket the more you may save
in taxes by owning your own home.

Amortization:

Over specific time of loan (30 years - 15 years - 7 years
- 5 years - 3 years - 1 year, etc,), you will pay your mortgage
gradually through regular, monthly payments of principal and
interest. The amounts of these payments are calculated to
let you own your home debt-free at the end of a fixed period.
During the first few years, most of your payments will be
applied toward the interest you owe. During the final years
of your loan, your payment amounts will be applied almost
exclusively to the remaining principal. This type of re-payment
is called amortization. In addition, when you sell your home
you will be required to pay back any remaining principal balance
due on your mortgage loan to your lender.

Four major factors that affect your mortgage payments:

The price of the house is determined by location, size, special
features (such as garage, a deck, an extra bathroom, extra
master bedroom), and over all market condition. However, before
you fall in love with your new home, learn the four factors
that maybe the key to whether or not you can afford that house
of your dream.

The size of your down payment,

The amount of your mortgage,

Your mortgage interest rate, and

Re-payment term of the mortgage loan you choose.

A change in any of these four factors will influence how
much house you can afford. Examine each of these four factors
in detail and carefully, so you can get a good grasp of your
buying power.